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Survey shows more significant adjustments in Q2 2019 U.S. commercial insurance prices

Commercial Lines Insurance Pricing Survey Q2 2019

Doradztwo ubezpieczeniowe i technologie
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September 9, 2019

Willis Towers Watson’s Q2 Commercial Lines Insurance Pricing Survey indicates significant upward price adjustments for multiple lines.

U.S. commercial insurance prices surged upward in the second quarter of 2019, according to Willis Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the second quarter of 2019 to those charged for the same coverage during the same quarter in 2018. The aggregate commercial price change reported by carriers was close to 2% for all four quarters of 2018 and the first quarter of 2019, climbing to almost 4% in the second quarter.

Line of business price changes

Data for four standard lines indicated significant price increases in the second quarter: commercial auto, commercial property, excess/umbrella liability, and directors and officers liability. The latter three approached double digit increases in aggregate for the first time in several years. The past outlier in the results, commercial auto, saw reported price increases near or above double digits for the seventh consecutive quarter. Price changes for most lines accelerated compared to first quarter 2019 increases. Directors and officers liability data had been indicating modest price increases for all of 2018, with sharp adjustments upward the past two quarters. CLIPS indicates ongoing material price reductions for workers compensation, in contrast to nearly all other surveyed lines.

Account size price changes

When comparing account sizes, reported price changes were adjusted upward for all account sizes in the second quarter, though much more significantly for mid-market and large accounts, compared to similar increases for all sizes in the first quarter of 2019. Specialty lines price increases also trended upward in the second quarter, driven by directors and officers and medical professional liability increases.

Companies have revised their estimates of claim cost inflation in aggregate for 2018 to just below 3%, which translates to nearly equivalent levels of indicated loss ratio deterioration.

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